It has been over a month now since the Bank of England announced they were increasing the Base Rate by 0.25% to 0.5%*. Since this was the first base rate rise in 10 years, one of the biggest questions has been, how this will impact mortgages and mortgage rates?
Adam Nanson, Managing Director and Independent Mortgage Broker at Your Mortgage Expert discusses the impact:
“The first thing to remember is that, the interest rate has just changed to the level that it was before, which was still relatively low. And, although it is a slight increase, it is only a quarter of a percent, so our main message to our customers is not to panic!
“Most of our customers chose a fixed rate because a fixed rate offers certainty around how much their monthly mortgage commitment will be. So, this is the area that has drawn a lot of interest.
“Despite the interest rate rise, lenders haven’t been rushing to increase their interest rates for new borrowers**. And, while some have increased their rates slightly, they remain extremely competitive***. In fact, a couple of lenders recently lowered their rates for new borrowers****.
“The main group of people impacted by the Base Rate change will be those on a Standard Variable Rate Mortgage. Generally, people find themselves on the Standard Variable Rate after their initial fixed or tracker rate term has expired. Most lenders have now increased their Standard Variable Rates, which means if payments haven’t gone up already, they will do soon. On average, standard variable rate payers will pay £504 more a year because of the Base Rate change*****.
“If people are worried about their mortgage interest rate, we would really encourage them to speak to their mortgage broker to confirm whether they remain on the most suitable mortgage product for them. We will take time to review your situation to establish whether you could be paying too much, whether you would save money by switching to an alternative product and whether any fees would be payable should you do so.”
If you are interested in having a no obligation chat about your mortgage, why not get in touch? We don’t charge anything up front, so by speaking to us, you are under no obligation. We are based in Salisbury, Wiltshire, but we can help you no matter where you live in the UK.
Simply call us on 01722 322683 or complete a contact us form on our website and tell us when it would be best to get back in touch with you.
The information contained within this article was correct at the time of publication. It is intended for information only and does not constitute advice. TenetLime cannot be held responsible for information that was correct at the time of publication but subsequently changes or goes out of date due to changes in legislation. For further information, contact Your Mortgage Expert on 01722 322683.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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